Aug 25, 2015 Uncategorized Comments Off on Taiwan to use state funds to stabilize plunging stock market (dpa German Press Agency)
Taipei (dpa) – Taiwan said Tuesday it would put state money into the
stock market to “bolster investor confidence,” a day after the bourse
plunged more than 7 per cent.
The National Stabilization Fund (NSF) had been authorized to invest
up to its total reserves of 500 billion Taiwan dollars (15 billion
US dollars), vice premier Chang Shan-tseng said, following a meeting
of the fund’s management committee.
The NSF has been authorized to intervene in the market six times
since it was established in May 2000.
The current conditions were the result of both domestic economic
weakness and a slump in international markets, said Deputy Finance
Minister Wu Tang-chieh, who is also executive secretary of the NSF.
The Taiwan Stock Exchange Index (TAIEX) suffered its worst fall in
history of nearly 7.5 per cent Monday, as markets in China and
elsewhere in Asia tumbled.
The TAIEX closed at 7,675.64 points, up 265.30 points or 3.58 per
cent on Tuesday, according to the Taiwan Securities Exchange.
But some experts expressed caution. The NSF’s contribution would
neither boost confidence nor support growth, said Lin Shang-kai,
emeritus professor of economics at National Taiwan University.
“The reason investor confidence is low is due to structural
fundamentals, especially Taiwan’s excessive trade dependence on
China,” he told dpa.
“The government’s best option would be to boost domestic private
consumption spending by a moderate hike in the minimum wage.”